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Warren Buffett Wearing "Belt and Suspenders" As Tide Went Out - KBW Analyst

Warren Buffett likes to say, "It's only when the tide goes out that you know who's been swimming naked." That's his way of saying a downturn exposes those who had been taking on excessive risk when times were good.

In a glowing report on Berkshire Hathaway today from a stock analyst, the other side of the tide:

"Paraphrasing a Buffett analogy, the tide has gone out and Berkshire is not just wearing shorts, but a belt and suspenders in the form of financial strength and quality operating businesses."

Cliff Gallant at Keefe, Bruyette & Woods has started coverage of Berkshire's Class A with an "outperform" rating. His stock price target is $107,000. That offers about a "25% potential upside, which includes no Buffett premium."

Current price:

Gallant calls Berkshire "a myriad collection of high quality businesses, particularly in insurance and reinsurance, with attractive long-term growth prospects." He especially likes GEICO, saying it "may have the best business model in the insurance world today."

While noting that while Berkshire has suffered some setbacks from its derivatives positions, the global crisis has left Buffett's company "standing tall as one of the world's few financially sound institutions." Gallant says $25 billion in cash, along with little debt and low leverage ratios, give Berkshire "one of the world's strongest balance sheets."

UPDATE: Gallant was interviewed live by Melissa Lee and the CNBC Fast Money traders today, Monday. Here's the clip.

Current Berkshire stock prices:

Class A:

Class B:

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